Deck 9: The Product Experience: New-Product Development and Service

Question 1

According to the consumer product adoption process,laggards refers to a group of people who are product avoiders and who want to evade adoption as long as possible.

Answer 1

True

Question 2

Cost reduction is a method for introducing lower-cost products that frequently focus on value-oriented product price points in the product mix.

Answer 2

True

Question 3

In the product adoption process,consumers move through five stages that can be described as awareness,interest,desire,trial,and rejection.

Answer 3

False

Question 4

Success or failure of a new product is determined primarily by the actions of the company.Making bad decisions by not identifying the value proposition,designing and building a product that fails to meet customer expectations,and incorrectly pricing the product are all factors that increase the likelihood of new product failures.

Question 5

Early adopters are opinion leaders who seek out new products but are price sensitive.

Question 6

If a product is not successful early in a new product launch,management is often unwilling to spend additional dollars as the product becomes more widely distributed.The end result is usually a downward spiral.

Question 7

The number of products purchased by the same customer is called repeat purchases.This can be important with things like stereos and cell phones which are considered convenience goods.

Question 8

A stop-to-market mistake happens when a company fails to stop a bad product idea from moving into product development.

Question 9

Products being developed in the new product development process are often given code names.During the test marketing process they still carry the code name until the product is ready to be fully commercialized.

Question 10

A service can't be stored or saved up for future use.

Question 11

A go-to-market mistake is made when a company fails to stop a bad product idea from moving into product development.

Question 12

Research suggests that consumers prefer environmentally sensitive products,but are unwilling to pay a significant price premium.

Question 13

The first step in the new-product development process is to define the product opportunity.

Question 14

The challenge for the new product development team is to design and build a product the customer wants to buy while hitting the company's success metrics--sales price,revenue,profit margins,unit sales,and cost to build.

Question 15

A service is first produced and then sold.

Question 16

When consumers purchase a product for the purpose of making a value decision in the product adoption process,it is called the trial stage.

Question 17

According to the consumer product adoption process,the early majority refers to a group of people who are the prime candidates for beta testing.

Question 18

Large and small companies face the same issues when it comes to developing new products.

Question 19

develop the product opportunity.

Question 20

Alpha testing encourages customers to evaluate and provide feedback on the prototype.

Question 21

When new-to-the-world products are better,faster versions of existing products that target,for the most part,existing customers it is said that these products are ___________.

A) Neo innovations
B) Subtle innovations
C) Left handed innovations
D) Sustaining innovations
E) Disruptive innovations

Question 22

One way to extend the product is by ___________.

A) Creating additions to existing product lines
B) Creating new names for the same product
C) Repositioning the product
D) Introducing the product to a new market
E) Encouraging repeat purchase

Question 23

In today's workplace everyone is involved in service in some way; everyone has customers either outside or inside the firm,or both.

Question 24

Most airlines will not let a customer change a super-low-fare ticket because once the plane backs away from the gate,the value of the empty seat is zero.

Question 25

No matter how good a company's current products are,long term growth depends on _________.

A) Recycled products
B) Product deletions
C) Product enhancements
D) New products
E) All of the above

Question 26

When one considers the product and where its value comes from,it has become obvious over time that value comes from the tangible product and its features and the services which surround it are not an important part of the overall product experience.

Question 27

Products that create a fundamental change in the marketplace are known as __________.

A) Recycled products
B) Product modifications
C) Incremental enhancements
D) New-to-the-world products
E) Repositioned products

Question 28

When talking about new products,what does new mean?

A) New-to-the-world
B) Modification to existing products
C) Additions to product lines
D) Repositioning existing products
E) All of the above

Question 29

A fundamental rule in marketing is to not set customer expectations so high that they cannot be effectively met on a consistent basis.

Question 30

Customers view new products much differently than companies.Customers only care if the product is ______.

A) New to their retail store
B) New to them
C) Offered through a new outlet
D) Offered on-line
E) None of the above

Question 31

Products that are new-to-the-world create a product situation which can be described as ______________.

A) Supply chain shifting
B) Innovation by intimidation
C) Diluted innovation
D) Disruptive innovation
E) Destructive innovation

Question 32

New product development is a critical success factor for most organizations.The percent of new products that fail worldwide is ________.

A) 20 to 30 percent
B) 30 to 50 percent
C) 50 to 70 percent
D) 70 to 80 percent
E) 10 to 20 percent

Question 33

The _____ approach is a method for introducing lower cost products by eliminating or reducing features,using less-expensive materials,or altering the service or warranty to offer the product at a lower price point to the market.

A) Innovation diffusion
B) Profitability analysis
C) ROI
D) Time to market
E) Cost reduction

Question 34

New-to-the-world products are products that _______.

A) Have been available before but are recycled
B) Are repositioned
C) Have not been available before their introduction to the market
D) Are not disruptive to the market place
E) None of the above

Question 35

Success or failure of a new product is determined by the actions of the company.The factor or factors that increase the likelihood of failure can be described as _______.

A) Poor marketing communications
B) Failure to meet customer expectations
C) Incorrect pricing
D) Failure to identify the value proposition
E) All of the above

Question 36

The service-profit chain identifies that increases in service through the cultivation of employees leads to higher customer costs and the potential erosion of profits.

Question 37

We operate in an economy that is increasingly focused on intangible offerings-services,instead of just physical goods.

Question 38

Desktop computers,cell phones,and PDAs are examples of new-to-the-world products considered _________.

A) Disruptive innovations
B) Continuous innovations
C) Sustaining innovations
D) Modifications to existing products
E) Faster versions of existing products

Question 39

Almost all people switch from one service provider to another on account of high prices.

Question 40

For start-up companies,the main reason for failure of new products is _________.

A) Lack of technology
B) Lack of capital
C) Lack of innovative ideas
D) Lack of access to distribution markets
E) Competitive pressure

Question 41

Time to market is a term that indicates _________.

A) The best time to market a new product
B) The duration for which a company has been in a particular market segment
C) How long it will take to develop and get a product to market
D) How long it will take to get a product through the introductory stage to the growth stage
E) How long it will take to get a product from the awareness to adoption stage

Question 42

Customers are sometimes excellent sources of new product ideas.They typically are not good at coming up with ______.

A) Money making ideas
B) New-to-the-world ideas
C) Ideas that make sense
D) Brand saving ideas
E) None of the above

Question 43

Many times customers provide ideas to salespeople,customer service representatives,and other direct customer contact people in the firm.These types of people who work with customers are generally good at generating ideas that are ________.

A) Game changing products
B) Innovative leaps in design
C) Incremental changes to existing products
D) Challenging for R&D due to their aggressive nature
E) Related to repositioning of existing products

Question 44

If new-product development does not follow a timeline _____.

A) Development costs will, most likely, exceed established budgets
B) The quality of the product will be substandard
C) Marketers will have more time to test market the product
D) The product can be further refined
E) More consumer interest can be generated

Question 45

The third stage of the new-product development cycle is _________.

A) Identify product opportunity
B) Develop the product opportunity
C) Define the product opportunity
D) Define the value proposition for the new product
E) Define the target market for the new product

Question 46

Product testing done internally by engineers,product specialists,and other employees is called as _________ testing.

A) Reliability
B) Alpha
C) Beta
D) Variability
E) Gamma

Question 47

A go-to-market mistake is made when a company ________.

A) Buys an outside product to mix with its current other products
B) Fails to stop a bad product idea from moving forward into product development
C) Fails to stop advertising when it is clear that the product is not going to make it
D) Fails to order enough of a new product to supply its customers
E) Prematurely eliminates a good idea during the screening process

Question 48

An analysis of a new product idea during the screening stage often includes an internal assessment by ________.

A) Finance, marketing, R&D, manufacturing, and logistics
B) The ethics committee for new products
C) The product line coordinator for the area the new product is going to be located
D) The new product development coach hired to coach the process for getting the new product to market
E) All of the above

Question 49

With services,continual investment in training,retraining,and good management of people are required if __________is to be consistently low.

A) Perishability
B) Intangibility
C) Inseparability
D) Variability
E) Scalability

Question 50

MySpace.com was a start up by two entrepreneurs who just wanted a place to hang out.It grew to 117 million uses and was purchased by News Corp.This is an example of __________.

A) Larger companies not being able to create disruptive innovations on their own
B) Smaller companies being the hot beds for debt-based incubation
C) Predatory pricing by technology companies
D) Companies growing through acquisition of smaller companies with innovative new products
E) All of the above

Question 51

Companies are creating ________ that address the demands of smaller groups.

A) More specialized products
B) More generic products
C) More engineered products
D) More customized bargain goods
E) More low cost goods

Question 52

Many organizations are too small to have a national sales force to help discover new-product ideas.For such companies ________ are a good source for new-product ideas particularly when they are the primary link between the customer and the company.

A) Distributors
B) Parts manufacturers
C) Logistics companies
D) Market research firms
E) Consumer forums

Question 53

________________ are the single best source for new product ideas.

A) Consultants
B) Market surveys
C) Outside laboratories
D) Search engines
E) Internal sources

Question 54

A willingness and ability on the part of a customer to participate in communicating the brand message to others within his or her sphere of influence is known as _____.

A) Customer loyalty
B) Consumer promotion
C) Customer advocacy
D) Customer branding
E) Consumer allegiance

Question 55

CAFE standards are ________.

A) Standards for restaurants
B) Standards for coffee growers
C) Standards for automakers
D) Standards for cafeterias
E) Standards for emission control

Question 56

A stop-to-market mistake happens when __________.

A) A bad idea is allowed to make it to market
B) The screening committee decides to market a product that has a fatal flaw
C) A good idea is pushed forward without knowing the ROI of its execution
D) A good idea is prematurely eliminated during the screening process
E) A company introduces a new product without sufficient advertising

Question 57

One challenge facing companies is to generate new ideas for products.A good source for new-product ideas comes from ________.

A) R&D
B) Marketing
C) Manufacturing
D) Internal Employees
E) All of the above

Question 58

Firms must _________ all new-product ideas from the list of ideas that are generated by the idea generation stage.

A) Rank on the basis of cost
B) Screen and evaluate as quickly as possible
C) Develop a business plan for
D) Develop a scale model for
E) All of the above

Question 59

The new product development process is a difficult one.The time it takes to develop a new product is ___________.

A) Increasing
B) Same as it has always been
C) Decreasing
D) Indefinite due to the nature of financial markets
E) None of the above

Question 60

A low propensity to consider switching to other service providers is indicative of _____.

A) Poor customer service
B) Customer dissatisfaction
C) Low customer loyalty
D) High customer retention
E) Customer turnover

Question 61

Market testing is designed to help the company ________.

A) Adjust its marketing plan before product launch
B) Identify the counter strategies that the competitors will use
C) Forecast the future economic trends
D) Identify the ethical implications of the new product launch
E) Forecast changes in consumer preferences

Question 62

Firms practicing internal service quality are _____,that is,they place the customer at the center of everything that takes place both inside and outside the firm.

A) Operations focused
B) Market oriented
C) Customer-centric
D) Concerned with the product experience
E) Internally focused

Question 63

_____ involves treating employees as customers and developing systems and benefits that satisfy their needs.

A) Service inseparability
B) Internal marketing
C) Internal service value
D) Customer advocacy
E) Service branding

Question 64

The greater the ___________,the more market testing a company will want to do before a full product launch.

A) Profit motive of the company
B) Risk of alienation of existing customers
C) Risk of failure
D) Cost of doing nothing
E) Time required for manufacturing the product

Question 65

Before a company develops a full prototype of a new product,it often _________.

A) Creates simulations of the product so consumers can virtually feel like they have experienced the product
B) Creates packages and labels for the product
C) Creates advertisements that show the use of the product by the intended product users
D) Creates jingles that will be used to introduce the new prototype to the market
E) All of the above

Question 66

Total demand is a function of three separate situations,which can be described as ___________.

A) New, ideal, and impulse purchases
B) New, repeat, and replacement purchases
C) New, repeat and impulse purchases
D) New, impulse and replacement purchases
E) New, convenient, and impulse purchases

Question 67

Generation Millennium Computer Co.is trying to test a new product concept.It would be normal for the company to ____________.

A) Ask consumers if they would buy this product and ask how much are they willing to pay
B) Ask consumers if they would like any changes in the new product design
C) Ask consumers if they perceive the product to be different from other products on the market
D) All of the above
E) None of the above

Question 68

Beta testing is designed to __________.

A) Encourage customers to evaluate and provide feedback on the prototype
B) Let engineers inside the company test the product performance
C) Allow product specialists and experts assess a product
D) Identify sales prospects
E) Determine the physical characteristics of the product

Question 69

The business case analysis is an overall evaluation of a product and usually assesses ________.

A) The product's probability of success
B) The product life cycle
C) The future trends in the industry
D) The demographics of the target market
E) The psychographics of the target market

Question 70

_______ are often considered a more realistic picture of product growth.

A) New purchases
B) Revenues
C) Unit sales
D) Repeat purchases
E) Replacement purchases

Question 71

It is typical to develop a ___________ in the new product development cycle during the business case analysis stage.

A) Projection of total demand for the product over a specified period of time, usually five years
B) One year profit and loss statement due to the unknowns of the long term
C) Budget for the new product introduction for the first 6 months
D) Business description of the market as it looks 20 years from now
E) Cash flow projection for the entire product life cycle

Question 72

Companies often have to delineate a product's characteristics,which refers to ______________.

A) How the product looks
B) How the product feels
C) The physical elements of the product
D) The features of the product
E) All of the above

Question 73

Once a product is ready to be test marketed,________.

A) It is marketed under a code name
B) It is marketed with a brand identity and packaging that will be used when commercialized
C) It is marketed under a fake name to hide its real market existence from competitors
D) It is marketed with very different appeals than will be used in the commercialization phase to keep the benefits hidden from competition
E) None of the above

Question 74

The new product development process changed in the 1990's due to __________.

A) Increase in failure rates of new products
B) Decrease in the number of new ideas coming to market
C) Development of web-based design and research
D) Increase in the cost of taking products to market combined with high failure rates
E) Decrease in the cost of taking products to market

Question 75

After a new product is designed in the product development cycle it leads to a distinct set of physical characteristics and a detailed feature mix.At this point,the company would _________.

A) Develop a working prototype that is exactly as the new product will appear to the market
B) Develop a marketing strategy that is detailed but tentative
C) Set up infrastructure for the production of the new product
D) Identify sources of finance for the new product
E) Evaluate ethical aspects of the product

Question 76

Market testing can take a long time,and this can result in ________.

A) Competitors being able to develop marketing strategies to counter a product launch
B) The company losing the excitement of a new product
C) Competitors being able to sabotage the firm's efforts
D) On-line guerilla tactics by competitors that will disrupt the sales cycle of the product
E) None of the above

Question 77

The business case analysis stage is important because ________.

A) It is an overall evaluation of a product and usually assesses the product's probability of success
B) It represents another low cost analysis prior to developing a prototype product
C) The firm has already decided to take this product to the market and this must confirm this action
D) A, B and C
E) It predicts the future trends in the industry

Question 78

One method of developing a new product is to develop a model which incorporates more planning and follows a sequential timeline with key process metrics being met at each stage before moving on through the process.In this model,the product that results is __________.

A) A rough model that can be changed easily
B) A model that is considered close to the final product that will be rolled out to customers
C) A model that is put together in a form that can be decomposed into parts and altered to create new forms
D) A model that is inferior to the final product to test the worst case scenario of market introduction
E) None of the above

Question 79

For many consumer products,test markets run __________.

A) More than a year
B) More than two years
C) Less than two months
D) Less than a year
E) More than five years

Question 80

New purchases of new products are called _______.

A) Original purchases
B) Subliminal purchases
C) Purchase novelties
D) Trial purchases
E) Replacement purchases